Nepal, India, and Bangladesh signed a tripartite agreement allowing Nepal to sell 40 MW of electricity to Bangladesh using the land and infrastructure of India. Nepal Electricity Authority (NEA), Bangladesh Power Development Board (BPDB) and NTPC Vidyut Vyapar Nigam (NVVN) signed the agreement in Kathmandu on Thursday. Earlier, in December 2023, Bangladesh had approved a proposal for a 40 MW electricity purchase from Nepal and the final inking of the agreement was delayed due to the toppling of Sheikh Hasina’s government in Bangladesh.

According to the NEA, electricity generated from 25 MW Trishuli and 22 MW Chilime hydroelectricity projects will be exported to Bangladesh at the rate of 6.40 US cents. This agreement may facilitate about Rs. 1.22 billion earning annually for Nepal by exporting power to Bangladesh. The meter of the energy export will be in Muzaffarpur, India, and the losses up to that point would be borne by the NEA while losses from Mujaffarpur to the Bangladesh border would be the responsibility of the Bangladeshi company.

This tripartite power deal is a significant milestone in Nepal’s energy sector, marking the first time Nepal’s hydroelectric power is being exported to a third country. Nepal’s Energy Minister, Dipak Khadka, hailed the agreement as the result of six successful meetings between the joint task force and joint steering committee, which were convened after the signing of a Memorandum of Understanding (MoU) between Nepal and Bangladesh in 2018.

Indian Ambassador to Nepal, Navin Srivastava, described the agreement as a major step forward in promoting regional cooperation in power trade, reflecting India’s commitment to deepening cross-border connectivity in South Asia.

NEA has set ambitious goals for the future, aiming to export 10,000 MW of electricity to India and 5,000 MW to Bangladesh in the coming years, positioning Nepal as a key player in the regional energy market.

Sweta Singh (Kathmandu)